In the last years before the war there were many different concerns in Paris, honestly too many to cover in one episode, but this episode discusses a few of them.
Hello everyone and welcome to History of the Second World War Episode 66 - The Third Republic Part 6 - Political Cleanup. This week a big thank you goes out to Clayton, Joe, Sam, Matthew, and Hunter. For those who did not support the Popular Front, the events of June 1936 when the Popular Front took power were frightening. The strikes, the workplace seizures, and the general feeling of revolution were troubling, especially if they continued. Of course they did not continue, as we discussed last episode. With the fall of the first Popular Front government another, which would pursue a roughly similar program was put in its place under the leadership of Camile Chautemps as Prime Minister. The new government was made up almost entirely of Radicals, either of the Independent or Socialist variety and was primarily an early 30s style centrist government. There would be continued reforms in many areas of French society, some of the most important would be the creation of the nationalized rail system and greater rights to women which gave them their financial and legal independence. Before these changes women in France could not open their own bank accounts. These changes were important, and much was done to continue the changes made by the Blum government, but any threat of large scale changes based on Socialist or Communist principles were no longer a real threat. Then in 1938 the return of Daladier heralded another center right government which took France into the war years. A complicating factor in any major changes after 1937 was the loomign threat of conflict in Europe. These years were the years of rearmament when many of the nations of Europe believed that a war was in the future, they did not know when it would start or why, but they did believe that the risk of conflict was drastically increasing by the year. Eve nation began to look to its own defense in its own way and started to prepare as best it could. This brought with it economic and political strain, especially in the Western Democracies where it was challenging to balancing the competing demands of military rearmament, social change, and pacifist movements. In France this would lead to another major round of strikes in 1938 and the workers of France tried to ensure that the reforms made over the previous two years were preserved and made permanent, even under pressure from the government to start rolling some of them back. Part of this friction was caused by rearmament, which is a topic we are going to discuss a bit today. We are going to look strictly at some of the driving forces within French politics and foreign policy, and also discuss some of the financial discussions that were occurring around rearmament, then next episode we will talk in more detail about the military side of rearmament. This was because one of the major discussions that would occur in both London and Paris during the late 1930s was not just how to build up their militaries as quickly as possible, but also how to do so without ruining the nation’s finances, finances that were felt to be essential for the coming war.
One fact that deserves repeating, even if I have said it several times, is that the people making decisions in France during this period did not have perfect information about what other nations were doing. Intelligence gathering was a process, but one that could lead to incorrect information beign seen as correct. Within France there were two primary sources of information about other nations, which in our context is primiarly Germany lets just be honest here. The two groups gatherine intelligence were the Second Sections, or the intelligence sections, of the army, navy, and air force and the Service de Renseignements which handled signals intelligence and espionage. They of course both spent a lot of time trying ot determine what Germany’s military capabilities were, and when it was likely that Germany would use those military capabilities for a possible war. On the when question they actually would do quite well, at least in 1938. At that point they pinpointed the period between 1940 and 1942 as the point of greatest danger. If you then look at German military thinking during that same period in 1938, this estimate lines up pretty closely. Even secret internal planning between Hitler and the German military was based around a war starting several years after 1939. While they did a good job of determining the when, the strength of the German military was greatly overestimated. Just to give two examples of this overestimation: the French estimates for the number of German divisions that could be mobilized in case of war was 116 divisions, but it was in reality 72. They also believed that the Luftwaffe had 2,760 operational aircraft, with over 3/4 of that number being recent models. In actuality the Luftwaffe had just 1,669 operation aircraft, and only about half of those were modern and fully combat capable. This over-estimation would be of critical importance in the last years of peace because it caused a Frendh government and military which might already lean towards caution to lean even harder into caution. This level of caution would be the driver of many of the decisions made in the two years before the war started in 1939.
There were several examples of this caution in the years before the Munich Crisis. Before that moment there were multiple opportunities that the French could have started a war if they so desired. The German introduction of conscription, the remilitarization of the Rhineland, or the Anschluss were all situation where by technical treaty clauses the French would be able to claim that they ahd the right to attack Germany. In none of those cases did that occur, the reasons for this was varied in detail but broadly the same, it was difficult to get British and Italian backing for action, and the french military strongly recommended against going it alone. When Czechoslovakia turned into the next major crisis point, the factors had not greatly shifted, much like the Anschluss it was a small area of Eastern Europe which the French and Briitsh had few direct interests in defending. As it appeared that tensions were rising in early 1938 the governments under Chautemps and then Daladier who formed a new government in April were divided as to what the response should be. There were some ministers who favored a hard line with Germany over the Sudetenland situation and there were others who believed it was more important to work with the British, who were taking a more cautious and conciliatory tone. There were some within that cautious group who were swayed by the estimates of German military strength, with that massive over estimation of German military power causing some to support a course of action that reduced the possibility of war. Even with these voices among French leaders, during the spring and summer of 1938, it would be the French who were trying to push British leaders to support a more firm approach to German agitation. The French military was ill prepared for independent and decisive action, a shortcoming that mirrored the problems of 1936 when Germany had remilitarized the Rhineland. There were still many shortcomings in 1938 even though rearmament had started, and there was some concern within the Daladier government that any European war would simply open up Western Europe to be taken over by Communists, but this was met by growing resolve from some French politicians. The two strongest voices in the French government at this time would be Daladier and Georges Bonnet who was the Minister of Foreign Affairs. Bonnet would always be the voice of caution, while Daladier would grow in his general push for a stronger stance against Germany during the summer of 1938. These differing viewpoints would reach their climax on September 27th when Daladier even suggested a general mobilization during a cabinet meeting. The possibility of a strong French reaction was removed during the negotiations with Germany, which will be discussed in great detail in the next series of episodes, but for the French there was a silver lining in the political defeat. For one, relations with Britain were once again strengthened. Now of course the major downside was that the Germans had once again been the driver of events. Daladier would claim that he had done all that he could for the Czechs, but that the British simply refused to stand up to the Germans. In the aftermath of Munich there was a new urgency in French preparations for war, and while this would of course involve rearmament, it also involved a renewed focus on the creation and cultivation of alliances with other nations.
Those pushing for a greater emphasis on those alliances were taking some of a positive view, that with stronger alliances Germany would be in some way restrained. This was not the only view point though, and there were some that had already written off Eastern Europe as a lost cause, unworthy of further French investment. Such a pessimistic view of the overall situation would never enjoy the majority support, because if Germany really did control all of Eastern Europe it made the overall defense of France seemingly impossible, since it would give Germany access to so many additional resources. The end result in this thinking would be a report prepared by the French General Staff which outlined the huge quantities of raw materials that Germany could acquire in Eastern Europe, and also the large populations of people that would be arranged against Germany in a war, as long as they did not fall to the German armies in the early months of the war. One of the greatest what-ifs from the years before the war revolved around the complete failure of the negotiations between the French and British one one side and the Soviet Union on the other. The three nations would be involved in on again and off again talks for much of the 1930s, and they would culminate in many discussions after the Munich Crisis. From the French perspective the events in russia, particularly the massive purges of the military, had greatly decreased the military power of the Soviet Union, making them far less desirable as an ally. The growth in Russo-German relations during this period was also well known, and this raised concerns that any French military information shared with the Soviet Union would find its way to Berlin, making them hesitant to engage in detailed staff talks. Also, and this is a topic that will become critical in the last months before the war, there was always the question of whether or not the Soviet Red Army would ever be able to meaningfully intervene in a European War. The problem was that the nations of Eastern Europe did not want the Red Army wandering through their territory, as they were just as concerned about Soviet aggression as they were German aggression. These problems would eventually result in the Molotov-Ribbentrop pact, which is of course a story for another day. Interestingly, at this same time there were concerns in London about what the French were planning, particularly their views on the defense of the European lowland countries. The Lowland countries had always been an important part of British defense policy, in the past it was due to the naval bases that could be used by an enemy looking to invade England, and then in more recent years the concerns about air power being projected over the English channel amplified concerns. The French were certainly less concerned with this area, especially when it came to putting any effort into defending the coastal areas which were not of great French concern. Concerns about the fate of these areas would be one of the drivers for the escalating British assurances to nations on the continent that the British Empire would be there to help them in their defense. This meant greater guarantees both to France and other nations, as well as greater cooperations and more in depth discussions. Eventually the British would propose an official alliance and immediate military staff talks in early February 1939. This would set the stage for a joint strategy which would take shape over the summer of 1939. There would be a lot of traffice between the two capitals during these months, and there were both large and detailed decisions being made. These talks represented a large shift from both sides of the channel when compared to just a few years before. For the British it represented a massive shift and committed the British to the continent in ways that had not been seen since the First world War. Meanwhile for the French it represented the final break from any attempts at accomodation and alliance with Italy, with the new plans in the wake of the Italian drift towards Germany focusing on trying to keep Italy neutral. Nowhere was this shift more important than in the naval sphere.
Previously we discussed some of the staff talks that occurred between France and Italy in the mid-1930s, particularly in 1935 before the Abyssinian event. During that time there had been many plans made between the two nations aimed at a war with Germany, down to the fuel requirements of Italian bombers flying to targets in Germany from French airfields. However, the French naval staff was never a huge fan of an alliance with Italy, and in fact they had simply refused to have similar conversations with the Italian Navy. Admiral Francois Darlan would become Chief of the Naval Staff in January 1937 and would continue this policy. Franco-Italian antagonism in the naval sphere had a long history, and during the interwar years even as the nations were quite close together politically, the two navies still saw each other as their greatest threats. This drove much of the French and Italian interactions with the naval treaties in Washington and London. In both cases their primary concern was not necessarily how their navies matched up to the big three of Britain, Japan, and the United States, but mostly around how they matched up with each other. A similar comparison would drive rearmament efforts in the late 1930s. The greatest concern for Darlan and the French Navy was the work that the Italians were doing on two new battleships, the Littorio and Vittorio Veneto, which had been laid down back in 1934 and were scheduled to be completed by 1940, there were also plans to begin two new battleships which would be laid down in 1938. These would join several modernized battleships, which were of First World War vintage but greatly modified, as well as a host of smaller vessels. This Italian construction was the justification that Darlan gave for a large French naval expansion plan, which would also include tow battleships, which would have been the never completed final two ships of the Richelieu class, along with the maximum possible acceleration of the first two ships of that class, the Richelieu and Jean Bart. This was all done to at least match the Italian, which Darlan thought would be the first enemy that France would fight in a conflict. He would say in November 1937 that ‘If we consider, at the same time, that the liberty of this sea is for Italy a question of life or deaths, and even more so for us, it seems that any offensive action by our armies that had not been preceded by the conquest of the Mediterranean will be useless action.’ While this type of hyper anti-Italian viewpoint would not be common until after the Anschluss and Munich Crisis, everyone was certainly in agreement that the Mediterranean was crucial to any French war efforts.
Because of this important, and the drift of Italy away from good relations with France, naval discussions with the British would put great focus on the Mediterranean. French naval planning would also shift to a very aggressive stance near the end of 1938. However, no matter what argument was used, and how important Darlan and the other naval leaders claimed the naval war against Italy to be, it was almost impossible to convince other French naval leaders to shift resources away from the German front. Any aggressive action against Italy needed the French Air Force to cooperate, but it had its own missions in Germany which it considered to be far more important. Some progess was made in convincing General Gamelin that perhaps a more aggressive stance against Italy could bring a quick early victory that would secure North Africa and the vital supplies that the French war effort planned to draw from that area. Or as Gamelin would write in the spring of 1939 ‘In a Franco-British conflict against Germany and Italy, it is against Italy that the first Franco-British offensive efforts must be made. We will cover ourselves on the German side […] if possible, take the offensive action against Italy simultaneously in the Alps, Libya, and Italian eastern Africa.’ This mindset would result in discussions with London in March 1939 that resulted in a plan for an allied offensive in northern Africa to be launched at the beginning of a war. This would have to include a strong set of operations against Italian naval assets and their supply routes across the Mediterranean. The level of aggressiveness that the French planned in the Mediterranean would even sway British thinking, as they had been planning on making North Africa a secondary concern at the start of a war. Oddly enough, it would be the actions of the Italians that would prevent all of this from happening. They would make what would in reality be a pretty smart decision, to sit out the war for a bit, until after any ability of the French to commit to a proactive strategy in the Mediterannean had been lost.
While all of the military and foreign relation discussions were occurring, there was also another constant topic of conversation among French leaders, and it was all about financial planning. This comes back to the fact that the working assumption among French leaders was that the next war would be a long one, and so to facilitate fighting a long war France had to be able to finance a lengthy war effort. There were many different pieces to consider in this regard, and some examples are: the amount of capital that was available within the French economy to be either taxed by the government or invested in military industries, the amount of foreign currency available for the expected massive increase in imported goods, and the money necessary to finance mobilization which would be needed at a moment’s notice. These were all complicated by the fact that the best policies on day one of a war were not always the policies that could be politically supported during peace time. The first decisions that had to be made were around mobilization, and in those decisions they had to involve the leaders of the Bank of France. There were tensions between the two groups, primiarly around how a mobilization should be financed and what financial actions should be expected from the government when it occurred. The Finance Minsitry wanted the bank to provide a large line of credit that could be used a any moment for the massive burst of initial spending that would be required when a war started. The Bank wanted to push back against the government, insisting that while it would provide some money, it expected the government to also guarantee to make decisions about how it would then finance the war effort moving forward. They primarily wanted assurances that the government would enact changes to taxation and the taking out of loans to then finance spending, instead of depending on more money from the Bank of France. These options were politically unpopular, so there would be some resistance to any kind of pre-emptive taxation. The disagreements would prevent a more all encompassing plan for war finance that probably should have been created during the rearmament period. Some agreements ere reached before the Munich Crisis, for example in July 1936 the bank agreed to make over 2 billion francs worth of credit available immediately for mobilization spending if it was required. It would not be until after Munich that major changes were made and the bank, after both the Prime Minister and President came into the conversations, increased the line of credit up to 25 billion. The cost of mobilization is an important item to consider, especially as it related to all of the various points in time during the 1930s when France could have done so due to various moves from Germany. Taking a few million men, bringing them into the armed forces, and sending them to their wartime positions was very expensive, which made the government hesitant to take the step unless it was absolutely sure a war was going to occur.
After Munich there were also many discussions about what France planned to do after a war started, and one of those conversation topics was around exchange controls. The goal of these controls was to ensure that when the war started, the available foreign currency and gold that was available in France was used in an efficient way. The focus on the available gold reserves was a statistic that would be very important when it came to how the leaders of French finance viewed preparations for war. The theory was that the more gold that the nation had access to the more prepared it was for war, because that gold could be used for foreign imports. By this metric of preparation there was real progress made, with France’s gold holdings rising in the years and months before the war, topping out at around 3,000 tons in August 1939. This, along with a few other government policies around taxation and inflation, would have other benefits as well, and during the year before the start of the war capital that had left France during the years of deflation came back to France at an impressive rate. However, the undo focus on just that number was problematic because it would cause a real hesitancy spend money on improvements and work that needed to be done before a war started.
A brief discussion of financial matters during the first months of the war is also probably warranted here, particularly as it related to those gold reserves. When the war started the first changes that were made were to take advantage of domestic sources of money that could be gathered and spent. This involved the sale of war bonds, which amounted in 65 billion francs worth of income. Then there were also changes to the tax policies in France, with many different new taxes being introduced. For example there was a tax introduced on overtime pay, with those hours being taxed at a rate of 40%, this was particularly impactful in armament industries where there was a lot of overtime happening. Another was an excess-profits tax levied against corporations, again very impactful in armament industries. While these internal changes were made, externally agreements were made with the British that allowed for both nations to purchase from the other without having to pay for those purchases in hard currency. This allowed goods to to flow far more freely between the two empires. This alleviated some problems with the massive increase in foreign purchasing that would begin almost immediately after war was declared. These moves were all a net positive, but there were some problems that were not taken care of. Imports that were coming into France were not well controlled, and in fact it was kind of chaotic with a whole bunch of different businesess and governmental groups purchasing goods without much coordination. This went against the wishes of the Finance Ministry, as they wanted all foreign purchases to be centrally controlled to ensure that the available currency and gold reserves were used optimally. While this would have been a good move in terms of protecting those reserves, there were many within the government, including Prime Minister Daladier, that believed that by allowing a free flow of imports war production would be increased at a much faster rate, which was absolutely critical. While this may have been true, it was also disastrous for France’s gold reserves that had been so carefully husbanded in the years before the war. This would cause the Bank of France to notify the government that those reserves would be depleted by the end of 1940. Now of course, by that point there would be events that would mean that gold reserves were not the biggest problems for France by that time.